The Silly Season: What are my Obligations as an employer?
By Eleanor Gregan
With Christmas right around the corner, employers should be aware of their obligations to their employees. We have compiled a list of issues that employers should keep an eye out for during the silly season.
Alcohol in the workplace
Under the Health & Safety at Work Act 2015, employers are required to eliminate (or if it is not reasonably practicable to eliminate, then to minimise) risks to the health and safety of their employees. To meet this obligation, employers are required to identify potential hazards, assess their severity and likelihood of occurrence and to then acting accordingly. The legislation specifically includes alcohol as a potential hazard.
When employers are supplying alcohol to their employees in the workplace (for example, at the Christmas party, Friday evening drinks, etc.) employers must ensure any risks associated with alcohol are minimised. As the legislation does not set out any specific acts that an employer must undertake to eliminate these risks, it is largely up to the employer to decide what action to take to meet their legal obligations. As a minimum when serving alcohol to employees, in order to minimise risk and to maintain a safe workplace, we recommend that employers also:
- 1. Serve food;
- 2. Serve alternative alcohol-free drinks;
- 3. Ensure intoxicated people are not served alcohol; and
- 4. Provide safe transport home.
There can be substantial penalties imposed on employers (and officers) who fail to eliminate (or minimise) risks.
If you do not have an ‘Alcohol in the Workplace’ policy in place, then we recommend you contact our employment team to discuss the benefits of implementing one, as soon as possible.
Paying out annual leave
Many employees will be using their annual leave around this time of year. Employees can ask their employer to pay out one week of their 4 weeks’ minimum entitlement of annual leave each year. An employee requesting one week of their annual leave to be paid out must ask in writing and have completed 12 months’ employment.
However, employers must be careful to ensure they are not pressuring their employees to cash out annual leave. The purpose of annual leave entitlement is to allow employees “the opportunity for rest and recreation”. If an employee is being paid out his or her annual leave, then the purpose behind annual leave will not be achieved, and your employees will likely start 2019 tired and burnt out.
But if you do receive a “payout” request from an employee, then you:
- Must consider the cash up request within a reasonable time; and
- Must inform the employee of your decision in writing (but you do not have to provide a reason for such).
If you agree to payout up to one week of your employee’s annual leave, then it should be paid on the next payday.
Employers often require a close down period over the Christmas/New Year break. If you operate a business that has never implemented a closedown period before, then you cannot unilaterally enforce a closedown period on your employees. Rather, it should be implemented through a mutual agreement with your employees.
For employees who have worked for the business for 12 months of continuous employment, and have sufficient annual leave accrued at the time of the closedown period, this process is fairly straightforward. Those employees must stop work and take as much of their annual holiday balance as is necessary to cover the closedown period. If the employee does not have sufficient annual leave then it is likely that the employer and the employee will agree that the employee will take leave in advance or leave without pay.
It is quite common for employees to not have sufficient annual leave to cover the closedown period because they are a new employee with the business, who has not continuously worked for 12 months. If so, the employer may pay that employee 8% of his or her gross earnings from their first day of work until the close down period, and then his or her annual leave ‘date’ for the purpose of annual leave entitlement will be moved to that closedown date. Alternatively, employer and employee can agree that the employee will take leave without pay or leave in advance.
Where to from here?
Sometimes it’s tricky to tell if you’re meeting your obligations as an employer, and the Holidays Act can be a minefield to navigate through on your own. Our employment team addresses these issues routinely and is happy to provide you with the required legal advice and support. If you have any questions, please contact Eleanor Gregan at firstname.lastname@example.org or phone on 09 915 6142.